The principal results of operations with comments are presented in the following tables. All definitions are presented in Attachment A. The condensed consolidated financial statements of VimpelCom are presented in Attachment B. Reconciliation of each of OIBDA, OIBDA margin, ARPU and SAC to the most directly comparable U.S. GAAP financial measures appear in Attachment C.

Financial and Operating Highlights

• Net operating revenues reached $936.2 million, a year-on-year increase of 46%.
• OIBDA reached $482.6 million, a year-on-year increase of 58%.
• OIBDA margin was 51.6%.
• Net income totaled $150.2 million, a year-on-year increase of 37%.
• Operating cash flow was $362.9 million, a year-on-year increase of 69%.
• Approximately 50.0 million subscribers as of June 1, 2006 including 3.7 million subscribers in the CIS outside of Russia.
• Strong growth and improved subscriber market share in Kazakhstan.
• Two mobile operators were acquired in Uzbekistan bringing to five the number of countries where VimpelCom operates.

Key Consolidated Operating Indicators

	March 31, 2006	March 31, 2005	Change, Y-on-Y	Dec. 31, 2005	Change, Q-on-Q
Subscribers	48,052,800	30,748,400	56.3%	45,430,300	5.8%
% of prepaid	96.9%	96.2%	--	96.9%	--
Churn, quarterly	8.4%	5.9%	--	8.3%	--
ARPU (US$)	6.6	7.3	-9.6%	7.1	-7.0%
MOU (min)	107.8	86.9	24.1%	106.5	1.2%
SAC (US$)	12.6	14.3	-11.9%	13.8	-8.7%

Key Consolidated Financial Indicators

	March 31, 2006	March 31, 2005	Change, Y-on-Y	Dec. 31, 2005	Change, Q-on-Q
Net operating revenues (US$,000)	936,167	640,636	46.1%	910,421	2.8%
including interconnect revenue	59,720	10,519	467.7%	31,433	90.0%
OIBDA (US$,000)	482,607	306,107	57.7%	419,692	15.0%
OIBDA margin	51.6%	47.8%	--	46.1%	--
Gross margin (US$,000)	768,298	531,690	44.5%	757,443	1.4%
Gross margin percentage	82.1%	83.0%	--	83.2%	--
SG&A (US$,000)	282,925	223,523	26.6%	335,666	-15.7%
SG&A percentage	30.2%	34.9%	--	36.9%	--
Net income (US$,000)	150,223	109,664	37.0%	151,748	-1.0%
Net income per share (US$)	2.94	2.14		2.97
Net income per ADS (US$)	0.74	0.54		0.74

 

Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said,

"Our business continued its successful development in the first quarter of 2006. This was the 26th consecutive quarter of revenue growth. In the first quarter of 2006, we achieved the highest quarterly OIBDA and OIBDA margin in our history. These results came on the back of strong performance both in Russia and Kazakhstan.

"The first quarter results confirm the stabilizing trend in ARPU which we have previously reported. We believe that stabilizing ARPU indicates that Russia, our main market, retains substantial growth potential.

"We would like to again specifically note improving momentum in Kazakhstan where our efforts to enhance the Company's position have started to bear fruit.

"Significant progress in Kazakhstan, good start in Ukraine and promising entry into Tajikistan and Uzbekistan substantiate our CIS expansion strategy and we intend to vigorously pursue it going forward."

In the first quarter of 2006, VimpelCom invested approximately $195.4 million for the purchase of property and equipment and $261.0 million for the acquisition of mobile providers in Uzbekistan.

In the first quarter of 2006 we began to revise interconnect charges with operators in Russia in anticipation of the introduction of CPP (Calling Party Pays) on July 1, 2006. As a result, our revenue and service cost increased by approximately the same amount. These interconnect revisions caused gross margin percentage to decrease by approximately 2 percentage points. However, the impact of further revisions to interconnect charges for future periods is still unclear and therefore cannot be derived based on our first quarter results.

Starting from the first quarter of 2006, in addition to consolidated financial and operating results, VimpelCom reports its selected results along the following reportable segments: (1) Russia, which includes the operating results of VimpelCom and all of its subsidiaries operating in Russia; (2) Kazakhstan, which includes the operating results of VimpelCom's subsidiary KaR-Tel; (3) Ukraine, which includes the operating results of VimpelCom's subsidiary URS; (4) Tajikistan, which includes the operating results of VimpelCom's subsidiary Tacom; and (5) Uzbekistan, which includes the operating results of VimpelCom's subsidiaries Buztel and Unitel. VimpelCom's management analyzes the reportable segments separately because of different economic environments and the different stages of development of markets of wireless telecommunications services in Russia and the countries of the CIS, which require different investment and marketing strategies. Accordingly, VimpelCom's reportable segments are presented and discussed separately below.

In countries with high penetration levels and predominantly prepaid subscribers, such as Russia, Ukraine and Kazakhstan, there are substantial numbers of multiple SIM card users and inactive subscribers. According to the current arrangements and legal requirements, subscribers in certain tariff plans may stay inactive but still remain registered as subscribers for a period of up to one year. In order to properly analyze our subscriber base and make proper comparisons with other markets, in 2005 we introduced the definition of active subscribers as those subscribers who made a revenue producing transaction in the past three months. We also started to calculate ARPU and MOU for the active subscriber base (see Attachment A). In addition to our standard presentation of performance indicators, in this release we present ARPU and MOU in Russia and Kazakhstan calculated on the basis of "active subscribers" and we will do the same for our new markets as soon as we establish more reliable data collection mechanisms for these statistics at our subsidiaries in those markets.

RUSSIA

 

	As of and for the three months ended March 31, 2006	As of and for the three months ended March 31, 2005	Change, Y-on-Y	As of and for the three months ended December 31, 2005	Change, Q-on-Q
Net revenue*) (million US$)	871.0	605.6	43.8%	859.2	1.4%
OIBDA (million US$)	462.3	293.9	57.3%	404.1	14.4%
OIBDA margin	53.1%	48.5%	--	47.0%	--
Net income (million US$)	155.0	113.5	36.6%	153.2	1.2%
ARPU (US$)	6.6	7.2	-8.3%	7.0	-5.7%
ARPUACT (US$) (active subscribers)	7.8	8.1	-3.7%	8.4	-7.1%
MOU (min.)	110.6	88.1	25.5%	109.5	1.0%
MOUACT (min) (active subscribers)	132.0	99.3	32.9%	131.4	0.5%
SAC (US$)	13.2	14.1	-6.4%	14.0	-5.7%
Subscribers	44,814,000	29,617,700	51.3%	43,096,700	4.0%
Active subscribers	37,373,400	25,980,300	43.9%	35,936,400	4.0%
Market share	33.9%	34.6%	--	34.3%	--

 

*) Excluding inter-company transactions.

In the Russian market, VimpelCom's focus is concentrated on stimulating increased usage of our services and revenue growth. In the first quarter of 2006 this resulted in improved trends in MOU (year-on-year and quarter-on-quarter increases) and ARPU (the lowest year-on-year and quarter-on-quarter decrease ever recorded by the Company in the first quarter). Our OIBDA margin in Russia was the highest ever recorded by the Company.

Due to significant strengthening of the ruble against the dollar during the first quarter we faced pressure on our net income from a substantial increase in our taxable income in our Russian accounts, as our debts stated in US dollars were favorably revalued leading to taxable foreign exchange gain. As a result, we recognized approximately $18 million of additional expense leading to an increase in our effective consolidated tax rate from 26.4% for 2005 to 32.7% for the first quarter of 2006.

KAZAKHSTAN

 

	As of and for the three months ended March 31, 2006	As of and for the three months ended March 31, 2005	Change, Y-on-Y	As of and for the three months ended December 31, 2005	Change, Q-on-Q
Net revenue*) (million US$)	54.0	35.0	54.3%	49.2	9.8%
OIBDA (million US$)	21.9	12.2	79.5%	17.0	28.8%
OIBDA margin	40.3%	34.8%	--	34.2%	--
Net income (million US$)	3.9	-3.8	--	2.5	56.0%
ARPU (US$)	7.8	11.5	-32.2%	9.1	-14.3%
ARPUACT (US$) (active subscribers)	8.8	12.4	-29.0%	10.3	-14.6%
MOU (min.)	40.0	53.6	-25.4%	43.4	-7.8%
MOUACT (min) (active subscribers)	44.8	57.9	-22.6%	49.2	-8.9%
SAC (US$)	6.1	17.6	-65.3%	11.4	-46.5%
Subscribers	2,512,700	1,130,700	122.2%	2,050,300	22.6%
Active subscribers	2,123,100	1,052,900	101.6%	1,813,900	17.0%
Market share	40.6%	35.2%	--	37.2%	--

 

*) Excluding inter-company transactions.

In Kazakhstan, VimpelCom made substantial progress in improving all financial indicators primarily due to rapid subscriber growth, efficient cost control and an improved interconnect regime. Recently, we acquired additional spectrum of 2.5 MHz in the 900 MHz frequency band, which will allow us to make a significant improvement to the capacity and quality of our network.

In the first quarter of 2006, operations in Ukraine, Tajikistan and Uzbekistan were in their initial phase and their contribution to the Company's results was insignificant:

UKRAINE, TAJIKISTAN, UZBEKISTAN: Selected financial and operating data as of and for the three months ended March 31, 2006:

 

Country	Ukraine	Tajikistan	Uzbekistan
Net revenue*) (million US$)	2.1	0.18	8.9
OIBDA (million US$)	-6.8	-0.05	5.2
Net income (million US$)	-9.5	-0.2	1.0
Subscribers	278,000	26,700	421,400
Market share	0.8%	9.5%	31.5%

*) Excluding inter-company transactions.

Business in Ukraine is developing in line with the Company's plans. We are in the process of integrating URS into the VimpelCom Group. The "Beeline" brand was launched in April 2006. The new brand and the associated marketing campaign have led to rapid growth in net additions. URS's incremental market share in April grew to almost 20% according to independent sources. URS is also applying substantial efforts to upgrading its network. In March, we acquired additional 1800 MHz spectrum in most of the regions in Ukraine.

VimpelCom acquired Tacom in Tajikistan in December 2005. At the time of acquisition, the company owned a number of licenses, including GSM 900/1800 but its GSM network was at the initial stage of development. Currently, we are focusing on building the network and conducting preparations for launching the "Beeline" brand. We expect to introduce our brand in Tajikistan in the fall of 2006.

VimpelCom's acquisitions of Unitel and Buztel in Uzbekistan were completed in January-February 2006 and the two acquired companies are now in the process of being integrated into the VimpelCom Group. We expect to introduce our brand in Uzbekistan in the fall of 2006.

The Company's management will discuss its first quarter 2006 results during a conference call and slide presentation on June 1, 2006 at 6:30 pm Moscow time (10:30 am ET in New York). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay and the slide presentation webcast will be available through June 8, 2006 and June 30, 2006, respectively. The slide presentation will also be available for download on VimpelCom's website http://www.vimpelcom.com.